All data shows the ever increasing trend towards online shopping converting GenX and Millenials. It's become a day to day expectation. 2021 will not be the same as 2019 and not everyone will return to the office. More and more clients have cited the requirement of a same-day delivery being an expectation - Today and not 3-5 days. It more cost effective than what you thought. Have a chat to Quikr!
Online Delivery Trends
Online retail and same-to-next-day delivery has been an increasing trend and continues to rise. In 2014, a McKinsey report on logistics trends highlighted same-day delivery as “the next evolutionary step in parcel logistics,” and since that writing, that prediction has certainly come to pass.
With supply and demand only increasing since then, how impactful are delivery options when it comes to business perspectives? Here are a few statistics:
1. By 2020, ecommerce sales will account for nearly 15% of total retail spending worldwide. (Source)
The massive increase in ecommerce is outpacing the growth of overall retail sales. Business owners and consumers alike can expect ecommerce sales to reach $4 trillion in growth by next year, which is nearly doubled from similar sales in 2018.
2. Nearly half of consumers (44%) stated they were willing to wait for two days for orders delivered via fast shipping. (Source)
This represents the results of a U.S. consumer survey regarding fast shipping of online deliveries. Nearly half of consumers said they were willing to wait within two days for a delivery as opposed to a quarter of consumers who said they would wait within 3-4 days. This 20% drop off illustrates the importance and expectation that most consumers have when it comes to standard two-day shipping.
3. The Holiday season continues to be the leading shopping season—and online shopping during that time is only increasing, as 57% of consumers shifted their purchases through online channels last year alone. (That includes all generations, except seniors, preferring online formats to physical store formats when making purchases). (Source)
Not surprisingly, mobile usage for online shopping has increased, as more retailers are pushing the importance of pre-Thanksgiving sales. In fact, that same report found that early shoppers are expected to spend roughly 28% more than late shoppers.If you’re concerned about how your operation will perform during peak holiday season, there are still steps that you can take to get your facilities and personnel ready.
4. That survey also found 56% of GenXers and 55% of Millennials prefer online formats to physical stores. (Source)
GenX and millennials prefer online formats, which shouldn’t surprise anyone, however, online formats are a strong preference across all generations as well. That preference remains in line with the higher share of online channel spending trends during the holiday season, so the importance of online channels during the busy holiday season cannot be stressed enough—across all ages.
Impact of Fast and Same-Day Delivery
From a business perspective, it’s easy to see how online shopping has become a standard practice for most consumers. It has also given rise to a demand for more advanced shipping options promising faster and faster delivery:
5. More than 70% of consumers cite convenience (77%) and free shipping (72%) as their top reasons to shop online. (Source)
Over 60 percent of that same group also noted the time saving benefits and home delivery of online shopping was a key factor in making purchasing decisions as well.
6. 41% of consumers are willing to pay a charge for same-day delivery while nearly a quarter (24%) of shoppers said they would pay more to receive packages within a one-or two-hour window of their choosing. (Source)
The increased emphasis on same day delivery and shorter windows when it comes to delivery options has many leading consumer companies and their shippers re-evaluating everything from caps on the numbers of packages shipped to pricing schemes in general.
7. This has led to a greater emphasis on shipping benefits as well, as 72% of Amazon Prime users cite unlimited free delivery as the most important benefit of the service. (Source)
This report took input from more than 22,000 consumers in 27 territories. In addition to showing the importance of free shipping, it also provides an insight into shoppers’ expectations when it comes to delivery. That trend isn’t ending anytime soon either, as one-quarter of users say they value Prime’s free two-hour delivery option.
8. Beyond Amazon, 61% of U.S. and 68% of Canadian shoppers said free delivery (in general) is their top consideration for most purchases they make. (Source)
This data from the 2018 State of eCommerce Delivery Consumer Research Report: North American Insights examines exactly how delivery choices influence online purchasing options for consumers. As previously mentioned, more delivery options—and more importantly—faster delivery options are a key factor when consumers make online purchases.
9. That same report revealed 82% of consumers in the U.S. were willing to have purchased more items in order to take advantage of a minimum spending ‘free delivery’ option. (Source)
Furthermore, the report revealed 79% of consumers in Canada and 75% worldwide stated similar responses. This aligns with the previous statistic on Amazon Prime where consumers consider delivery options as the highest value with the service.
10. 70% of U.S. consumers choose to purchase goods from one online provider over another because they provided more delivery options. (Source)
Not surprisingly, these numbers were high across the globe as well with over 60% of consumers citing delivery options as a key factor when choosing online providers. As with Amazon Prime, consumers are willing to pay more for faster, more efficient delivery services.
The Impact On Customer Satisfaction From Same-Day Delivery
With an increase in online retail, business owners will need to adapt and reevaluate the best practices to ensure customer satisfaction, as shown in the statistics below:
11. Consumers say that digital retailers often meet their delivery speed expectations nearly 50% of the time (45%). (Source)
Consumers expect online orders to be shipped and delivered to their doors as soon as possible, however, with an increasing demand for online orders, the strains on parcel delivery and shipping companies has become more intense. This report, however, shows that consumers’ expectations are being met at a reasonable rate in the face of higher demands with shorter windows for delivery.
12. 42% of customers report they were previously impacted by a breach of personal information, while 38% say they are somewhat likely to allow a retailer to digitally identify them in-store for special promotions and offers. (Source 1, Source 2)
Data breaches are cause for concern for anyone accessing information online. The same could be said for consumers, however, most are willing to forgive data breaches if the company took appropriate action. Consumers also note they would continue doing business with that company if they simply changed their payment method as well.
13. In return for sharing personal data, 61% of customers say they want some sort of promotion in return. (Source)
Business owners have always been pressured to find incentives to attract customers and the same can be said for online retail. Personal data such as location and basic contact information has become standard practice when visiting virtually all retail websites. Most consumers are willing to share that information, if a promotional incentive is provided.
14. The high demand for same-day delivery cannot be overstated, however, most retailers are falling short of this expectation with just over 50% offering same-day shipping. (Source)
Compare this statistic with over 75% of consumers desiring same-day shipping and there is a significant gap. This gap, however, offers a chance for significant growth and opportunity, as a greater emphasis in specifying the expected time for delivery can help measure and weigh consumer expectations.
15. What do consumers consider fast shipping? According to 97% of consumers, same-day shipping is considered “fast” while 95% consider next day shipping to be “fast”. (Source)
Consumer expectations for fast shipping are generally within the same-day or next-day delivery categories, however, (as previously mentioned) business owners can seize this opportunity by considering that consumers are willing to pay more for faster delivery options. It’s also important to note that consumers greatly value more delivery options when choosing a company or purchasing a product.
The Bottom Line
As you can see, when it comes to delivery options for your order fulfillment or retail operation, timing matters. The impacts of ecommerce are only increasing, promising to bring new challenges to the forefront when weighing delivery goals with consumer expectations.
However, this challenge presents a great deal of opportunity as well. Advances in technology, coupled with a reevaluation of shipping practices, can go a long way in helping an operation meet consumer expectations while ensuring customer satisfaction.
Ultimately, providing fast delivery options is both necessary and vital in today’s world of business. Afterall, fast delivery is not only something consumers want—it’s what they’ve come to expect.
If you are unsure of the precise technologies or processes that would most benefit your order fulfillment operation, a trusted systems integrator can help. Are you ready to get started? Schedule a free consultation with one of our expert systems integrators to see how you can prepare for this and future holiday seasons.
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Ed Romaine Ed Romaine has spent over 30 years involved with organizations looking to optimize their distribution, manufacturing, and warehousing operations. Focusing on the customer’s processes, automation and business model, Romaine has helped dozens of organizations improve profitability by reducing labor, floor space, errors and inventory while improving accuracy, inventory turns and cut-off times. Within the industry trade association, MHI, Romaine has taken numerous leadership positions including: Chairman of the Automated Storage & Retrieval (AS/RS) Group, Chairman of the Order Fulfillment Council of America, Chairman of the Warehouse Execution Systems Group and was one of the originators of the Carousel and VLM Product Section Group. He has also spearheaded the efforts to create the first ANSI industry safety standards for horizontal carousels. Romaine is a frequent editorial and information contributor to hundreds of publications, blogs and online publications and has been a speaker at dozens of Supply Chain, Logistics, Lean and Facility organizations and functions. Just a few include the Parcel Forum, Institute of Industrial Engineers (IIE), Promat, North American Material Handling, Modex, National Mfg Week, Southern California Plant Operations, NJ Material Handling Assoc., Applied Ergonomics, Warehousing Education & Research Council (WERC), Lean Manufacturing Conference, Council of Supply Chain Management Professionals (CSCMP), NeoCon, Health Information Distribution Association (HIDA), National Catalog & Operations (NCOF), CSCMP and more.
